To be honest, this sounds like the experience you would have with any other merchant bank. They have zero impact on if you win the dispute or not, and most of those charges from them are likely (marked up) pass-thru.

The deeper you go into this world the more upset you are going to get. Basically the answer in pretty much absolutely any dispute or anything out of the ordinary is "merchant pays". It's not worth your time to dispute it in the manner you did, as you will likely find out over time.

Your story sounds like at least a dozen merchant banks I've worked with in the past in various capacities, I'm honestly surprised they even spent that much time talking to you about it. Things may be changing this day in age, but 10 years ago basically any card not present transaction that was disputed you automatically lost, and the Visa or Mastercard network would charge you the $35 for the trouble of you being defrauded by a customer :)